Billers, Players, and Developers

Arnold Kling discusses Nassim Nicholas Taleb, distinguishing between two types of jobs. Billers are wage workers: high floor, low ceiling, meaning that you get your wage with little chance of bankruptcy or riches. Players are gambling on commissions, big payouts, etc.: no floor or ceiling. A great accountant will earn little more than an average one, while an author might sell millions of books or die in penury. This latter economic state is often described as a tournament: the winners win big, and the difference in winnings between #1 and #2 will be far larger than the difference in quality of #1 and #2.

MMO development companies are players. We have big winners, games that go bankrupt or nearly so, and scattered moderate successes and hangers-on in between. Despite their differing subscriber numbers, WoW is not 10 times better than EQ2 (whatever that would mean). Most indie games will fail, and others will be bought by EA or something.

MMO developers are billers. If you work for Sony or NCSoft, you get a paycheck rather than a percent of the take. Just like you the player, your friends on the development team are not going to get rich and drive into the sunset with a Ferrari full of hookers and blow. Well, Nicodemus plans to, but he’s a special case. When you think about WoW being flush with money, you can remember that their community manager is still eating ramen.

And a few places (mostly indies) skirt the line because developers have stock, options, a share of the company, etc. If the game hits it big, folks who are vested will cash in. Or they will continue to work long hours for free Mountain Dew.

My perfect example is 38 Studios. Professional athletics is the usual example of a tournament game, where a great pitcher gets millions while someone 2% worse hopes to keep a spot on the Mud Hens. Now that money is invested in a game studio. If you work there for a wage with no profit sharing, that wage is what you get. Curt Schilling stands to lose millions, and you risk needing to find a new job. Or he might be the owner of the next WoW. We’ll see how that tournament works out.